Will Staples (SPLS) Miss Earnings? - Analyst Blog

By: Zacks.com

Posted: 3/4/2014 10:50:00 AM

Referenced Stocks: AZO;BLL;CCI;SPLS

Staples, Inc.
(
SPLS
), the office supplies retailer, is slated to post fourth quarter
and fiscal 2013 results of Mar 6, 2014. In the last quarter,
earnings of 42 cents a share came in line with the Zacks
Consensus Estimate. Let's see how things are shaping up for this
announcement.

Factors this Past Quarter

In the previous quarter, lower sales on account of store closures
and lower product margins took a toll on Staple's earnings.
Margins contracted primarily due to reduced product margins,
unfavorable impact of fixed expenses on reduced sales and
investments related to the company's strategic initiatives. These
negatives were offset by savings pertaining to headcount
reductions and fall in marketing expense and equity compensation.
However, given the decline in business and consumer spending in
the wake of the global meltdown, the office supply retailers are
going through a rough patch.

Earnings Whispers?

Our proven model does not conclusively show that Staples is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
Earnings ESP
(Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for
this to happen. That is not the case here as you will see below.

Negative Zacks ESP
: Staples currently has an Earnings ESP of -2.56%. This is
because the Most Accurate estimate stands at 38 cents, while the
Zacks Consensus Estimate is pegged at 39 cents.